Future Retirement Success
  • Politics
  • Business
  • Investing
  • Stocks
  • Politics
  • Business
  • Investing
  • Stocks

Future Retirement Success

Business

Rising mortgage rates force housing market slowdown

by November 10, 2022
November 10, 2022
Rising mortgage rates force housing market slowdown

House sales continued to slow last month while the rental market picked up pace as prospective buyers put off purchases amid the surge in mortgage rates.

Inquiries among new buyers fell for a sixth consecutive month in October and the average time taken to complete a sale rose as buyers became wary about a looming recession, according to the latest survey from the Royal Institution of Chartered Surveyors.

The net balance for new buyer enquiries fell sharply to -55 per cent in October, down from -36 per cent the month before, suggesting that prospective buyers are increasingly cautious about purchases as financial conditions deteriorate.

House price growth, which hit record levels during the pandemic, has ground to a halt as people’s budgets are squeezed. The net balance for house prices stagnated in October after 28 consecutive months of growth. The index score fell to -2 per cent, down from 30 per cent in September.

The average time taken to complete a sale from the date of the initial listing rose to 18 weeks, up from 16 weeks in October last year.

However, rental prices continued to rise, with a net balance of 42 per cent of survey respondents reporting an increase in the past month. The number of new landlords fell, with a net balance of -14 per cent over the same period.

Demand was outpacing supply in the rental market, pushing up forecasts for rental prices, Simon Rubinsohn, the institution’s chief economist, said, adding that it was “difficult to see this changing any time soon in the current environment”.

The price of rental properties is expected to rise as the stock of homes available to let fails to keep up with demand. Chartered surveyors polled by the trade body expect rents to have risen by an average of 4 per cent across the country in a year’s time.

House buyers are facing a jump in the cost of borrowing after the Bank of England last week increased interest rates for the eighth time in a year, taking the base rate to its highest level since the global financial crisis at 3 per cent.

Central bank officials have warned that further rate rises are on the way amid fears that inflation, initially caused by a surge in global energy prices, has become “embedded” in the economy via higher wage demands and businesses’ plans to continue increasing the prices of goods and services. However, interest rates are not expected to rise as far as the 5.25 per cent priced into the money markets ahead of the Bank’s decision last week, ratesetters have said.

Since just before the pandemic, house prices have risen by more than 25 per cent, according to estimates published on Monday by Halifax, the mortgage lender. Even with the recent fallback, prices remain near a record high.

Average prices fell by 0.4 per cent to a five-month low of £292,598 after dipping by 0.1 per cent in September, according to the index, the sharpest fall in prices since February last year. The annual rate of growth dropped to 8.3 per cent from 9.8 per cent the previous month.

Rubinsohn said: “The latest feedback to the RICS survey provides further evidence of buyer caution in the face of the sharp rise in mortgage costs. As a result, the volume of activity is likely to slip back over the coming months and realistic pricing is now much more important to complete a sale. The settling down in financial markets could provide some relief, although it may be premature to assume this will be reflected in a reduction in lending rates any time soon.”

Tom Bill, at the Knight Frank estate agency chain, said house prices had peaked. “We expect prices to fall back to the level they were at in summer 2021 as rates normalise after 13 years,” he said.

Read more:
Rising mortgage rates force housing market slowdown

0
FacebookTwitterGoogle +Pinterest
previous post
Crooked Election Operatives Still “Counting” – GOP Currently Leads House 209 – 191
next post
UPDATE: Breakdown of the Remaining 621,856 Ballots Left to Count in Arizona Via Kari Lake’s Senior Advisor – “No Mathematical Path for Katie Hobbs” (VIDEO)

You may also like

How easy and affordable it is to get...

October 29, 2024

How the ESG agenda evolved in Russia: Detsky...

January 16, 2024

Patient-Centered Care: PAM Health Shares How Acute Care...

April 16, 2024

Survey reveals over three-quarters of UK business leaders...

April 13, 2023

Understanding Cookies and Sessions in Web Development

December 18, 2023

UK Businesses Face Elevated Financial Distress Amidst European...

February 5, 2024

Huel and Zoe ads banned over undisclosed links...

August 13, 2024

Renting Tips: The Significance That Macbook Rental Offers

February 23, 2023

How Important Is It To Know How To...

February 10, 2023

City Investment Firm Calls for Doubling of Minimum...

February 20, 2024

    Get free access to all of the retirement secrets and income strategies from our experts! or Join The Exclusive Subscription Today And Get the Premium Articles Acess for Free

    By opting in you agree to receive emails from us and our affiliates. Your information is secure and your privacy is protected.

    Recent Posts

    • Tillis’ retirement announcement draws reactions from Trump critic Jeff Flake, Bernie Sanders: ‘A cult’

      June 29, 2025
    • SCOOP: House Republican eyes bid for Thom Tillis Senate seat after Trump attack

      June 29, 2025
    • Dem delay tactic ends, debate begins on Trump’s ‘big, beautiful bill’

      June 29, 2025
    • GOP, Dem senators remain divided over Medicaid after Trump’s ‘big, beautiful bill’ vote

      June 29, 2025
    • The five liberal courts that tied Trump’s hands before SCOTUS clipped their power

      June 29, 2025
    • Thom Tillis announces retirement from Senate after clash with Trump

      June 29, 2025

    Categories

    • Business (8,334)
    • Investing (2,081)
    • Politics (15,864)
    • Stocks (3,177)
    • About us
    • Privacy Policy
    • Terms & Conditions

    Disclaimer: futureretirementsuccess.com, its managers, its employees, and assigns (collectively “The Company”) do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

    Copyright © 2025 futureretirementsuccess.com | All Rights Reserved